40-Year Cycle: Stock-flation Inflationary Stock Index Cycle Peak

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1 by Eric S. Hadik...Let us run with patience the race that is set before us. Hebrews 12:1 40-Year Cycle: Stock-flation Inflationary Stock Index Cycle Peak EXCERPT ONLY An INSIIDE Track Special Report on 40-Year Cycle Analysis 40-Year Cycle: Stocks Inflationary Stock Index Cycle Peak EXCERPT ONLY CONTENTS Late-2014 Cycle Peak...1 Stock-flation Week Cycle War/Stock Cycles...6 April 2015 Cycle...7 Late-2014 Cycle Peak... October Blues Oct The month of October has been a pivotal month in Stock Indices for many decades. That includes Black Friday in October 1929, Black Monday in October 1987, the minicrash that followed in October 1989, the post-kuwaiti invasion low of October 1990 (that ushered in the 1990 s bull market and the notorious Tech Bubble), the ensuing low of October that ushered in the next bull market and the real estate/subprime bubble of the 2000 s - and even the peak that ended that bubble, in October The funny thing is that October has represented the month of extremes. It has timed Major tops & crashes and it has pinpointed Major lows and opportune buying opportunities. So, what about October 2014? What will it hold? In order to begin to address that question, it actually takes a significant gathering of analysis - much of it already published - to construct a possible scenario for October 2014 and beyond... As this latest bull market has unfolded - from 2008/2009 and more so from Aug./Oct there have been corroborating cycles that helped hone this analysis. One of those has been the month cycle that has governed the Indices since the March 2009 low. It has been discussed for several years and subsequently timed lows in June/July 2010 & Oct After that, it arrived early - in Nov In retrospect (20/20 hindsight), that Nov low was linked to the Aug low in the Nasdaq which had arrived earlier than the Oct lows in the DJIA & S+P creating two competing cycle lows. That 15-month low-low cycle (Aug Nov. 2012) projected a subsequent low in Feb that arrived on schedule. But, there was more... INSIIDE Track Trading Page 1

2 Hadik s Cycle Progression & Stock-flation: That Feb cycle low had been corroborated by its half-cycle - an approximate 7.5 month cycle that helped pinpoint the late-june 2013 bottom (that was also discussed previously). And, a 7.5 Month Cycle from the early-feb low - and a 15 -Month Cycle from the late-june 2013 low - reached fruition in late-september Week Cycle The charts on page 4 are reprints of charts that were published in the June 2012 INSIIDE Track (along with corresponding analysis included on page 3) that reiterated this cycle - a cycle closely linked to the 11-Week Cycle that had been a frequent topic of discussion in The chart [on page 4] is the current action of the Nasdaq 100 and the Week Cycle that culminated on Sept , Actually, it has been a very precise, 32-Week Cycle since Nov The current NQ-100 peak of Sept. 19, 2014 completed a precise, 32-week lowlow-low-(high) Cycle Progression and closely followed the NYSE peak of early-sept. At the time, the NYSE & NQ-100 triggered daily trend pattern sell signals (on Sept. 19th/22nd - see corresponding Weekly Re-Lays) and projected a sharp drop into Oct , Other indicators leave open the potential for that decline to stretch into Oct , 2014 (see Sept. 25, 2014 Weekly Re-Lay for a breakdown of multiple signals and objectives corroborating this analysis). So, what does that mean for October? October Blues For starters, the action of Sept. 3rd/4th--Sept. 19th/22nd built expectations for a sharp drop in the first part of October Once these Indices - and the DJIA & S+P confirmed that (at least) an intermediate peak had taken hold in September, it clarified expectations for cycles in the first half of October (see reprint of Sept INSIIDE Track analysis on page 7), which could only be a low. That would actually be a better affirmation of future cycles in April As recounted on page 7, geometric cycles (90, (Continued on page 6) INSIIDE Track Trading Page 2

3 Week Cycle (2012 Analysis) 04/30/ Month+ Outlook: Stock Indices remain positive and on track for an overall advance into 3Q They completed their projected advance - from cycle lows in early-october into cycle highs in March - and have consolidated for the past 4-6 weeks. As described last month, the NQ had multiple cycles peaking on March th - including a 22- week high-high cycle (following an 11-week rally) and an overall 33-week advance from Aug. 2011, 1/2 of the 66 -week cycle that has spanned major lows in the DJIA & SP. It rallied into March 27th, fulfilled upside price targets and has not closed above that high since then...if a peak is seen in early-may - without turning the intra-month trend up - it would set the stage for a second, 2-3 week decline into May th. That is the time frame when an intermediate low (either higher or lower than the April lows) is likely 180 degrees from the November 25th low. It is also 33 weeks - the midpoint of the 66-Week Cycle - from the October 3rd/4th, 2011 bottom. The daily & weekly trends and price action should help clarify this. 05/31/ Month+ Outlook: Stock Indices have turned neutral with the S+P 500 & Nasdaq 100 futures reversing their weekly trends to down...there is also a cycle argument for some near-term support...these larger-degree cycles focused on May th. This led to the following conclusion, detailed in the May 16, 2012 Weekly Re-Lay Alert: Stock Indices remain in the c wave of an intermediate correction that began in late-march and that has been projected to extend into May th - when a multi-month bottom is likely...at the next phase of a week cycle (3xs the prevailing 11-Week Cycle & ½ of the 66-week cycle that has pinpointed 3 consecutive major lows). In the case of the S+P, this week cycle has created a week rally from the June/ July 2010 low, followed by a week decline into the October 2011 bottom. That October low projects an ensuing low, weeks later - on May th (potentially on May th )....It is always important to keep the bigger picture in perspective, so as not to lose sight of what is most important...as long as they hold, the Indices should rally back to their March highs. Oct The Week Cycle is a multiple of the 11-Week Cycle (discussed throughout 2011, helping to pinpoint the July 2011 peak and Oct. 3--7, 2011 bottom) - a cycle that is also at the root of a Week Cycle & Week Cycle, discussed since In 2012, it was forecast to pinpoint a low in late-may, which arrived right on schedule (see 11-Week Cycle series at for preceding articles). At the same time, an overlapping week (~7.5 month) Cycle Progression formed - connecting the late-march/early-april 2012 high with the Nov low and then the late-june/early-july 2013 low. That was forecast to lead to a February 2014 low - which took hold as anticipated. The ensuing phase of both the Week AND 66-Week (7.5 & 15-month) Cycles came into play in Sept on Sept , 2014 the exact time the Nasdaq 100 just set a spike high...april 2015 is the next phase! IT INSIIDE Track Trading Page 3

4 Aug. 6-10, Week Cycle Chart from 2012 DJIA Weekly Chart: 22, 33, 44 & 66 Week Cycle Progressions 44 wks. L-H 66 wks. H-H 44 Wks. L-H 22 wks. H-L 33 Weeks 66 Weeks 66 Weeks Sept Nasdaq Weekly Chart Week Cycle Feb April 2015 = Next Phase Nov June Week Low-Low-Low-(High) Cycle Progression - Sept , 2014 Peak? INSIIDE Track Trading Page 4

5 STOCK INDICES 08/29/ most synergistic in 4Q is not only when so many Stock Index cycles and timing indicators converge, it is also the completion/transition of multiple social/economic/financial cycles On a near-term basis, the Indices were expected to see a ~5% correction from intermediate cycle highs in July into cycle lows on August 5--14th (most synergistic on August 8th/11th) - at which point a new advance was projected to take hold. They did sell off; they did drop about 5%; and the Indices did bottom on August 7th & 8th and a new advance has taken hold. And that has reinforced at least one cycle in 4Q As with every turning point, there is current significance and future significance... that could have a profound impact on a momentous cycle date in The sequence involves the 90-degree cycle - but a different application of it. The DJIA set a pivotal low on Oct , 2013, which was followed by an equally important S+P high in mid-jan degrees later (the DJIA set a high earlier and could not retest that high in mid-jan.). On April 11th/14th, the DJIA & S+P set another decisive low [October th is next]. However, it is 180 degrees later that really intrigues me...mid-april overlaps a 40-Year & 240- Year Cycle I have discussed previously. They stem from the original/initial American war (first shot of Revolutionary War fired on April 19, 1775) and the end of the last Major war - Vietnam - in April As explained previously, April 2015 will mark the completion of a 40-Year Cycle of peace - and by that, I simply mean the lack of any American wars on the scale of the Revolutionary, Civil, WWI, WWII & Vietnam Wars. April 2015 will complete that cycle and usher in a new one when things could change dramatically, from that point forward. April 2015 is also EXACTLY 70 years from the defeat and death of Mussolini & Hitler in April 1945 (as well as Roosevelt, which led to the ascension of Harry Truman and the decision/events of early-august 1945). So, here again, it is the completion of a MAJOR cycle from the end of a momentous war... The point of all this is simple. Of all the primary, major, multi-year cycles I follow (11-Year, 17-Year, 40- Year, 70-Year and even a 200- & 240-Year Cycle) - and which have proven themselves accurate and consistent for centuries - ALL of them converge in April 2015, with respect to war and peace. October The lows of mid-oct & mid-april 2014 create a ~180-degree cycle that would be perpetuated with a low in mid-oct and project focus to the next phase in mid-april The implications and ramifications of that will be discussed in follow-up Reports and publications. IT INSIIDE Track Trading Page 5

6 180, 360 degrees or days) converge on Oct th and provide the perfect opportunity for a precursor cycle low. In other words, by fulfilling the potential for an intermediate low - and the culmination of a multiweek period of selling - Oct th could provide an archetype of what to expect in mid-april 2015, 180 degrees in the future. So, an intermediate bottom around mid- October could have very revealing current AND future ramifications... So, could the market events of October and the ensuing months - shed some light on what to expect in April 2015? Absolutely. And that will be the topic of an ongoing discussion... IT End of Excerpt of INSIIDE Track - 40-Year Cycle: Stock-flation The potential for a mid-oct. low could reinforce related cycles in mid-april Immediately after that 90/180-degree sequence, an equally profound cycle - the Week Cycle - will come back into play, in late-april/early-may Early-May 2015 will also be the next phase of the over-arching 66-Week Cycle ( months) that most recently pinpointed the Feb low and before that, the Nov low (and, before that, the Aug NQ-100 low). That Week low-low-low-high-(high) Cycle Progression AND ~66-Week low-low-low-(high) Cycle Progression could provide important clues as to what to expect in the late-april through late- Sept period that could be the undoing of the stock market as just described in the Oct INSIIDE Track (when a 20% decline becomes more likely). See publications for details IT Information is from sources believed to be reliable, but its accuracy cannot be guaranteed. Due to futures volatility, recommendations are subject to change without notice. Readers using this information are solely responsible for their actions and invest at their own risk. Past performance is no guarantee of future results. Principles, employees & associates of INSIIDE Track Trading Corporation may have positions in recommended futures or options. The discussion and/or analysis of any stock, ETF or Index is strictly for educational purposes and is not an offer to buy or sell securities nor a recommendation to do so. Please check all information before making an investment. No part of this publication may be reproduced or re-transmitted without the editor s written consent. All Tech Tips (underlined and italicized) -- as well as the term Tech Tips -- are trademarks of INSIIDE TRACK Trading Corporation and all unauthorized reproduction is strictly prohibited. Copyright 2014 INSIIDE Track Trading Corporation INSIIDE Track TM newsletter is published monthly with periodic (2-3/year) Special Reports. Eric S. Hadik -- Editor SUBSCRIPTION RATES: #1 - Monthly newsletter with periodic Special Reports (no intra-month Updates): $179 per yr. (12 issues) #2 - Monthly newsletter plus intra-month Updates: $199 for 6 mos. (6 issues & 6 months) #3 - Monthly newsletter plus intra-month Updates**: $297 per yr. (12 issues & 12 months) **Eric Hadik s Tech Tip Reference Library available for $249 (included as a FREE bonus with #3 subscription) Make checks payable to INSIIDE Track Trading. Credit Card payments can be made via (to INSIIDE@aol.com ) PO Box 2252 Naperville IL (vc) (fx) INSIIDE@aol.com HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY A PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE MANY OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF A SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS -- ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. INSIIDE Track Trading Page 6